The Report Company

Q&A Dr. M. K. Oolun - Executive Director of ICTA

The Report Company: The Mauritian government is placing a high priority on developing new sectors. When and why did ICTA become a priority for the government?

Dr. M. K. Oolun: It became a priority back in 1998 when there was a worldwide tendency toward liberalisation.

A white paper was drafted outlining a roadmap between 1997 and 2005 regarding the telecommunications sector. A major milestone of this was that we had to commit to gradually opening up the sector to full competition.

We managed to open up the sector, moving from one fixed operator initially to two fixed operators and three mobile operators. But once we opened up the sector we wanted to see how this liberalisation could then contribute to making life better for people as well as how it could make other sectors more competitive.

The financial services sector depends a lot on telecommunications infrastructure, and then we have had the emergence of other sectors like the BPO which is currently becoming very important for the economy, as well as the IT enabled services.

Importance was therefore given to the sector back in 1998 when Mauritius had to commit itself to the WTO agreement with a view to introducing trade in services; it was in that spirit.

TRC: In the global information technology report of 2010-2011, you were ranked 47th internationally and first in Africa. What do you attribute as the major cause of the success of Mauritius becoming the star of Africa in this sense?

MKO: I would attribute the success to the infrastructure, as this is lifeblood of the telecommunications service. Having Mauritius connected to the major international destinations for reliable connectivity has been one of the major strong points.

In addition, our education system has managed to produce a pool of well-educated people which means that potentially there is someone who can add value to telecommunications infrastructure that we have in place.

TRC: Could you give us an overview of the telecommunications scene in Mauritius and the main players and how it’s set up?

MKO: We have two fixed line operators, Mauritius Telecom and MTel, which is a 100% Mauritian owned company. We have three mobile operators, Orange, MTel and MTML, which is an Indian company. The good thing about our telecommunications sector is that we don’t have any restriction in terms of equity holding, it can be 100% foreign equity. We have a favourable operating environment, wherein we don’t have any kind of limitations on ownership.

On top of that we have 8 internet service providers and we’ve got an equal number of international long distance operators who allow international calls to be made to or from Mauritius from or to any part of the world. Since we introduced competition and allowed other operators in 2003 in line with our commitment to the WTO agreement, we’ve seen a very significant reduction in the price of international telecommunications - more than 95%. In terms of mobile communications, the termination rates that we have in this country are some of the cheapest in the world.

TRC: When did Orange come into the picture and are you happy with the general set up?

MKO: Orange came in as a joint venture with Mauritius Telecom and this was done in the implementation of our commitment to the General Agreement on Trade in Services (GATS). We had to privatise the incumbent operator and one of the conditions was to look for a strategic partner who could bring value into the local environment.

To that extent the joint venture has worked out well for the nation, especially in terms of innovation. Orange is one of the biggest global telecommunications groups and having them as a strategic partner means they have been able to bring in value, expertise and international reach.

TRC: How do you ensure that there is fair and efficient market conduct between companies in the information and communication industry?

MKO: In December last year there was an amendment to our legislation, which enabled us to carry out market determination with a view to establishing significant market powers.

The purpose of that is to define markets and define operators who might have some kind of influence in specific market segments. Once we do that then we can determine rules specifically for those players who have specific power. In a liberalised market it should be the market that influences retail prices. However, in a country the size of Mauritius, an operator like Orange having 40% of the market can really eliminate other competitors. So in this regard what we do as the regulator, having defined Orange as an operator with significant market power in a certain segment, we determine the prices. However, when it comes to retail markets and services where we believe the market is competitive enough, we give flexibility to the market to determine the prices. If an operator intends to implement a new tariff or pricing policy, they just have to inform the authority and if they get no reply from us in the next 15 days it means that it is approved.

TRC: What are some of the challenges in creating this level playing field?

MKO: The main challenge is to define the market. We are currently in the process of defining the markets in Mauritius right now and we do have our ears in other jurisdictions as well, we work a lot with our friends in France, in the UK with Ofcom and in Australia and India. We consult with them and very often try to seek their assistance in developing models. Very often what happens is if an operator has significant market power, they try to influence regulator decisions and this is where we have to ensure that we don’t enter into this kind of relationship. We are guided by our own instinct to make our own decisions.

TRC: You’re also the national regulator for the postal service. What is your assessment of the postal service in Mauritius and to what extent to you think it’s up to international standards?

MKO: I would say that it is up to standard. It has undergone various reforms since 2002, the post itself has been privatised, it’s now run as a company and we’ve seen great improvement in the service. The other thing we’ve seen is that there have been some major innovations in the postal service, with new products like e-post and public internet access, so they have changed their portfolio of services and moved away from classic postal services into the wider definition of communications. Indeed, to my mind the post office is the oldest telecommunications provider. As both the postal and the ICT regulator, we apply the same model to both contexts because it’s only the technology which is different, but the concept is the same.

TRC: How do you maintain standards when it comes to licensing ICT companies?

MKO: We adhere to a quality of service framework for the operators, which involve quarterly reporting from the operators, which are then checked by our team. The law allows us also to inspect any kind of platform that the operator has deployed to verify that what was written in the declaration form is actually what is being offered by that operator.

One of the fundamentals of telecommunication is to improve on connectivity so if you leave the rule of interconnection to the markets only, it might happen that at some point in time an operator will decide to apply pricing principles that will prevent others from connecting to its network. In our law we have two specific sections on interconnections and access. From day one when someone is given a license, the first question we ask is if they going to allow connectivity. It’s a condition before the license is given to any applicant.

TRC: You clearly understand the need for interconnectivity in Mauritius, so how are these advancements in ICT and this increased interconnectivity bringing changes to the Mauritian economy and society?

MKO: There is a third fibre optic cable which is going to connect Mauritius to Kenya that is currently being commissioned.

TRC: What are your thoughts about the possibility of having a totally wi-fi island?

MKO: The whole concept of a wi-fi island is already in the making. Wi-fi zones are being deployed under the Universal Service Fund which is managed by the authority. By the end of March the pilot phase of 10 hotspots should be live. To carpet the whole island with wi-fi connectivity will require about 1,200 hotspots.

The second phase will be to cover all the university campuses and this is where the quality of service will be much different, because we are talking about research networks and students who are much more bandwidth greedy.

In the next phase, we need to create a partnership program to engage other stakeholders who intend on their own initiative to deploy wi-fi as part of their CSR program, notwithstanding the fact that the universal service fund will be there to bridge the gap.

Now we would like to see how other stakeholders will behave, and if they’re all open to joining this project. Where we identify gaps in the market we will go back to the Universal Service Fund and look to fill them.

We have a national broadband policy which goes up to 2020, and what we intend to do by 2015 in line with the MDG target is meet our broadband universalisation targets, which we believe we will achieve.

TRC: What do you see in the next five years, will the ICT sector become the first pillar of the economy?

MKO: I believe ICT will be the underlying pillar of all our other sectors. I believe that for the next generation, ICT should be the normal way of doing business. It should be as entrenched in the daily life of people as mains electricity.

We are also trying to work out a project with the Ministry where we try to re-engineer communication within the civil service, e-government is one aspect of it and the other part is paperless communication within government. It will save time, energy and reduce our carbon footprint and bring a new culture. The advantage of being small is that ideas can become widespread in a very small period of time.